Indian economy picks up speed as restrictions are eased after second wave of pandemic

India’s economy is showing strong signs of recovery as several states begin to ease restrictions and cancel lockdowns imposed in response to the brutal second wave of coronavirus infections.

Nomura India’s Business Resumption Index (NIBRI) reportedly climbed over the 100-level mark for the first time since March 2020, when the pandemic initially crossed the country’s borders. 

The index, which tracks mobility data from Google and Apple, labor force participation rates and power demand, hit a record high of 101.2 in the week ending August 15 after dropping to as low as 60.4 in late May, when the toll of daily infections in India was record high.

As of August 14, the seven-day average of daily cases in India dropped to 36,874 from a pandemic high of 391,008 recorded in May.

“The recovery from the second wave has been very swift: it took the NIBRI nearly 10 months to crawl back towards the 100 mark after the first wave of Covid-19, but less than three months to cross 100 after the second wave,” Nomura India said, as quoted by the Economic Times.

According to the consultancy, the rapid recovery in Indian economic activity after the second wave inspires optimism for its growth forecast of 10.4% for 2021-2022.

The median estimate for the first quarter of the current fiscal year shows the Indian economy grew around 19.5%, in the range of 14.2-23.3%, while the full-year gross domestic product (GDP) is projected to increase in the range of 7.9-9.6%. The growth rate will reportedly benefit from a depressed base in the first quarter of 2020.

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